The paper asks whether a government can run a deficit today — issuing "stimulus checks" — and allow debt to return to its initial level without any future tax hike or spending cut. In environments …
The paper addresses two questions about government debt rollover. First, a positive question: what is the maximum ratio of government bonds to capital that can be sustained forever without any primary …
Solving the full dynamic Ramsey optimal-taxation problem (not just the welfare-maximizing steady state) in an Aiyagari (1995)-style incomplete-markets economy, this paper proves the long-run optimal …